Suidy Of How Pricing Competition Impacts E-marketing Performance

The dramatic improvement of IT has brought a brand new trading pattern,E-business has got to be the most popular trading pattern, learning how to make the full use of Internet as a platform to reinforce the major players’ own competitiveness has become a compulsory course, and learning how to upgrade the performance of E-marketing being the core part of this course. With the intensified competition, Price is the most widely used method to gather consumers, making price dispersion a new market phenomenon. A significant point lies on how price competition effects e-marketing. This paper analyzes the effects of price competition on e-marketing performance theoretically and evidently and it also provides practical samples for companies’ reference on conducting an e-marketing activities, The practical meaning of this study is based on the discussion on how to improve e-marketing performance by adjusting prices. The content of this study includes:Firstly, beginning with the overview of price competition, this study illustrates the origins of price competition and discusses the status quo of modern e-business by concluding and analyzing studies conducted by both national and international experts, Through the overall study, a fact is reveled that no standard was set upon the classification of e-marketing KPI factors due to the lack of studies on effects that could impact e-marketing. This paper clarifies the existing theories and studies on e-business market in the literature review section and offers a draft of e-marketing KPI factor system by research and analysis on e-marketing KPI factors.Secondly, this paper analyzes modern price competition and current situation of market as well as the searching theories of market prices, including seller fact, consumers’ factor, competition factor and trading procedure fact, etc. which basically explains where price competition stems from and how the factors effect. The following section deduces the macro effects through the analysis on e-marketing KPI. The analysis was accomplished in two parts: positive effects and negative effects that price competition have on e-marketing performance, drawing a conclusion on how price competition effects e-marketing--rational price competition makes better resource allocation possible, but excessive price competition brings negative impacts and goes against further improvement of e-marketing performance.In addition, this studies combines the conclusion of related research and the detailed situation of the market, making a macro analysis on impacts of price competition on e-marketing as well as reasons for price dispersion. Moreover, with Porter’s Five Forces and Maslow’s demand theory, this paper makes a preliminary conclusion that e-marketing factor system includes three layers, six level-one factors and twenty level-two factors. The system is simplified after screening by consulting experts.At last, a curve fitting of price competition(measured by dispersion of price) and the factors in the system is conducted based on a fitting of polynomial of Least Squares, a conclusion is drawn according to the analysis outcome, the performance of e-marketing goes up with the increase of commodities’ price dispersion at the first stage and drops after price dispersion has reached a certain level. To be detailed, when price dispersion ranges from 40% to 50%, the e-marketing performance is at the peak, And in range 50% to 80%, however, the performance begins to go down with the continuing increase of price dispersion. A suggestion is given according to the outcome, Companies should lower the price to maximize the e-marketing performance with a targeted strategy with a thorough consideration of their own tolerance power when managing to improve their e-marketing performance.